Report: Efficiency Gains Needed for Shipping to Meet Emissions Goals

The shipping industry is too complacent currently with too much focus on the future fuel transition to achieve the decarbonization targets set for the maritime sector says a new report issued by UMAS, a sector-specific consulting service working in partnership with the University College London Energy Institute. In their detailed analysis, they conclude the use of liquified natural gas is “irrelevant to the GHG reductions achieved in 2030,” calling instead for more focus on the development of the supply chain for hydrogen-derived fuels and greater efficiency improvement.  

While much discussion relating to shipping decarbonization is centered on how quickly low and zero GHG emission fuel production can ramp up, UMAS in its report shows that irrespective of how new fuels enter the global fleet, the nearer term 2030 target predominantly needs a further step change in energy efficiency in the global fleet. According to their research, approximately a 40 percent improvement in efficiency compared to 2018, or 55-60 percent greater efficiency than the fleet’s average efficiency in 2008 will be required to ensure the maritime sector is aligned with global goals.

“Industry is increasingly under pressure to align with 1.5ºC and has broadly embraced that this can only be achieved by a fuel transition,” said Jean-Marc Bonello, Principal Consultant at UMAS. “However, this may distract from the fact that significant gains in energy efficiency through technologies, including wind assist, and operational measures are needed this decade so start reducing GHG now. There are well-known options, that will not see significant uptake without much stronger regulatory and voluntary focus and attention.”

The report observes that the fuel mix in shipping is already changing with the growth of LNG as a marine fuel, as well as the focus on biofuels such as bio-methanol and the increasing intent to use more scalable hydrogen-derived fuels such as ammonia. However, the study looks at four different scenarios and taking into account expected growth in international shipping and low levels of fuel substitution by 2030 finds the industry must do more to meet the target of 37 percent absolute lifecycle emission reduction by 2030.

All of their scenarios show little impact on GHG emissions of shipping by 2030 based on fuel mix. To get to the efficiency improvements that they believe are necessary to align with the GHG targets, UMAS writes that the existing fleet must make direct operational improvements or retrofits to adopt available technologies. 

“International shipping is currently on track for a complacent 2020s, followed by a highly disruptive 2030s caused by a turbulent, expensive, and late fuel transition. The greater the efficiency gains in the 2020s, the lower the investment needs and costs associated with fuel transition, and the longer the time available for fuel transition,” said UMAS’s Tristan Smith. “At present the 2030 ambition/target and by association the efficiency opportunity, are not getting the attention they deserve, at the expense of the industry and those it serves.”

The report highlights that the International Maritime Organization (IMO) schedule does not look to mandate near-term revisions for operational improvements till 2026. UMAS calls on the IMO to incorporate these elements into the MEPC 80 meeting in July this year sending clear signals to the industry. Waiting three more years they believe could create objections from the industry to sudden mandates and fail to get the maritime sector on track to achieve the emission goals. 

To achieve the desired alignment by 2030, UMAS presents three options for regulators. They believe the IMO’s current Carbon Intensity Indicator (CII) and Energy Existing Ship Index (EEXI) could be effective but need modifications to increase the required annual reductions. Following this path they say removes the need for mid-term measures such as new efforts with carbon pricing or fuel standards.

An alternate approach would be to focus short-term on efficiency improvements with more aggressive measures and regulations followed mid-term by measures on fuel substitution. This could also be achieved with regional regulation and voluntary initiatives to drive compliance beyond the IMO thresholds.

Ports they suggest could also complement the IMO process to provide incentives for efficiency improvements. Countries and regions they write could take steps to encourage ships with the highest CII ratings to use their ports.

They conclude that aligning with the global targets and achieving decarbonization in the maritime sector requires parallel activities. These must focus on maximizing energy efficiency while the industry also transitions away from the use of fossil fuels to emerging alternatives.

UMAS made its full study entitled "How Can International Shipping align with 1.5°C?" available online.